Asian stocks set for a rough ride as tensions rise

HONG KONG - Asian stocks are set for a cautious start on Monday as increased geopolitical risks combined with expensive valuations prompt investors to shun risky assets in favor of safe-haven bets such as government debt.

Top aides to US President Donald Trump differed on Sunday on where US policy on Syria was headed after last week's attack on a Syrian air base, while US Secretary of State Rex Tillerson warned the strikes were a warning to other nations, including North Korea.

A US Navy strike group will be moving toward the western Pacific Ocean near the Korean peninsula as a show of force, a US official told Reuters on Saturday, as concerns grow about North Korea's advancing weapons program.

MSCI's broadest index of Asia-Pacific shares outside Japan is likely to edge lower at open after falling 0.4 percent on Friday.

"Shares remain vulnerable to a short term pull-back as investor sentiment towards them is very bullish and a lot of good news has been factored in which has left them vulnerable to any bad news," said Shane Oliver, head of investment strategy at AMP Capital in Sydney.

Data also offered little support with major US indexes closing lower in choppy trade after a key jobs report on Friday showed the economy added 98,000 jobs in March, the fewest since last May and well below economists' expectation of 180,000, as bad weather hit construction hiring.

With valuations on the S&P 500 at its highest levels since 2004 on a forward price-to-earnings basis, market watchers will be hoping for stellar earnings results in the March quarter to keep markets propped up.

The yen, a favoured haven in times of stress, was holding its own against the dollar in early trades at 111.27 yen, after touching 110.14 on Friday, its lowest since March 28.

Yields on 10-year US Treasuries closed at 2.37 percent on Friday after briefly breaking a significant chart barrier at 2.30 percent for the first time this year.

Spot gold was last at $1,254.70 per ounce. It has rallied nearly 5 percent over the past month.

Oil prices held firm at $52.50 per barrel, on risks that the Syria conflict may spread more widely within the oil-rich Middle East region.

source: news.abs-cbn.com

Wall Street ends at record highs; dollar loses steam

* Dow, S&P 500, Nasdaq, Russell 2000 hit record highs

* European shares edge higher

* US yields stable after 2-year yields hit 6-1/2-year high

* Dollar falls on profit-taking

* US crude tumbles 4 pct on uncertainty over production cuts

* Gold prices hit 9-1/2-month low

NEW YORK - Key stock indexes on Wall Street swept to record intraday and closing highs on Black Friday thanks to gains in consumer staple and technology shares, while European stocks climbed and a stabilization in US Treasury yields promoted investors to sell the dollar.

The Dow, S&P 500 and Nasdaq indexes, as well as the small cap Russell 2000, hit record closing and intraday highs in thin trading, with the US stock market closing at 1:00 p.m. ET (1700 GMT). For the week, the Dow and Nasdaq gained 1.5 percent, while the S&P 500 rose 1.4 percent.

The S&P 500 consumer staples index's 0.8 percent gain boosted shares on Black Friday, which traditionally kicks off the U.S. holiday shopping season.

European stocks notched a third straight week of gains, even as a tumble in oil prices dragged commodities shares lower. Uncertainty over whether OPEC will agree to cut production at the group's meeting next week weighed on crude prices.

Expectations that US President-elect Donald Trump's promises of tax cuts, higher infrastructure spending and reduced regulation would benefit certain industries, including banking, industrials and healthcare, have underpinned multiple recent all-time highs in U.S. shares.

"While many stocks have risen quite briskly, investors are looking for some forgotten names in the rally," said Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey.

MSCI's all-country world equity index was last up 1.86 points, or 0.45 percent, at 414.99.

The Dow Jones industrial average closed up 68.96 points, or 0.36 percent, at 19,152.14. The S&P 500 ended up 8.63 points, or 0.39 percent, at 2,213.35. The Nasdaq Composite closed up 18.24 points, or 0.34 percent, at 5,398.92.

Europe's broad FTSEurofirst 300 index closed up 0.29 percent at 1,351.66.

While positive for stocks, Trump's surprise victory in the Nov. 8 election has sent US Treasury yields higher as investors bet his pro-growth and inflationary policies will erode the value of US bonds.

US Treasuries were last steady after two-year yields hit a 6-1/2-year high of 1.17 percent overnight as investors evaluated how much further the selloff had to run.

"There are a number of people that want to buy in but also don't want to get whipped by the next 25-to-30 basis point selloff," said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York.

The dollar index, which measures the greenback against a basket of six major currencies, was last down 0.3 percent at 101.430 as investors took advantage of the pullback in US bond yields to lock in gains after the dollar hit a nearly 14-year peak on Thursday.

Despite Friday's steep losses, U.S. and benchmark Brent crude oil prices eked out a second straight week of gains. Brent crude settled down $1.76, or 3.59 percent, at $47.24 a barrel. U.S. crude settled down $1.90, or 3.96 percent, at $46.06 a barrel.

Gold prices tumbled to a 9-1/2 month low of $1,171.2100 an ounce, partly on expectations of a U.S. interest rate increase by the Federal Reserve next month. - With additional reporting by Yashaswini Swamynathan in Bengaluru, Jessica Resnick-Ault in Boston and Karen Brettell and Gertrude Chavez-Dreyfuss in New York

source: news.abs-cbn.com

Dollar soars on US yield gains, Asian shares wobbly

TOKYO - The dollar vaulted to 13 1/2-year highs against a basket of major currencies as US bond yields rose, leaving Asian stocks vulnerable to potential rotation out of emerging markets to the United States.

MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.3 percent in early trade to hover just above its four-month low touched earlier in the week. It looks set to log its fourth straight week of losses.

The dollar's rise, however, was a boon for Japan's exporter-driven Nikkei average, which rose 0.9 percent to a 10-month high.

On Wall Street, the benchmark S&P 500 index rose 0.5 percent to within a hair of its record high as bank stocks were boosted by bets on higher interest rates and consumer discretionary stocks were helped by favorable economic data and earnings.

US consumer prices posted their biggest increase in six months, while housing starts surged to a 9-year high and jobless claims fell to the lowest level since November 1973.

All these data fit nicely into the current market's theme that US inflation is likely to accelerate under Trump administration's policies such as tax cuts, increased fiscal spending and more trade protection for domestic industries.

The 10-year US Treasuries yield rose to 2.326 percent, its highest since January. The two-year US Treasuries yield rose to a 10 1/2-month high of 1.058 percent.

"I think the rises in US yields have been driven by excessive optimism in the stock market on Trump's economic policies," said Shuji Shirota, head of macro economic strategy at HSBC in Tokyo.

Rising yields reflect market players' reassessment of the Fed's policy path down the road, although Federal Reserve Chair Janet Yellen told the Joint Economic Committee of Congress on Thursday that Trump's election has done nothing to change the Federal Reserve's plans for a rate increase "relatively soon."

Yet market perceptions have clearly changed, with money market futures pricing in about a 90 percent chance of a Fed rate hike in December.

They are also pricing in one or more rate hikes next year, a sea change from before the election when they priced in a less than 50 percent chance of a 2017 rate hike, assuming the dovish Yellen would be extremely cautious in raising rates.

The dollar rose to 110.34 yen, its highest level since early June. The euro slumped to $1.0620, a low last seen almost a year ago.

The dollar's index against a basket of six major currencies rose above its "double top" touched in March and December of 2015. The index now stands at its highest level since 2003.

"Double top" is a technical analysis term describing a currency (or other liquid asset) rising to a high, falling, and then rising again to the same level. Breaking the double top is often seen as a bullish sign by technical analysts.

Gold slumped to 5 1/2-month low of $1,211.6 per ounce and oil prices, which have been supported by hopes the Organization of the Petroleum Exporting Countries would reach an agreement to cap production at its meeting in Vienna on Nov. 30, were hit by the dollar's strength. US crude futures slipped to $45.05 per barrel from Thursday's two-week high of $46.58.

source: www.abs-cbnnews.com